Aer Lingus takeover: Calls to block IAG bid

Aer Lingus takeover: Calls to block IAG bid

POLITICIANS and airline employees are calling on the Irish Government to block a bid by British Airways owner IAG to take over Aer Lingus and its valuable Heathrow slots.

Since the national carrier confirmed on Monday that it is considering a £1billion buyout offered by the International Airlines Group (IAG), concerned politicians and Aer Lingus passengers and personnel have called for the sale to be rejected by the state.

While Transport Minister Paschal Donohoe prepared to brief the Government on the IAG bid during Tuesday’s cabinet meeting, Fianna Fáil’s transport spokesperson Timmy Dooley was one of the first to speak out about the negative impact of the potential takeover.

“IAG’s pursuit of Aer Lingus is becoming more aggressive with every passing week, and I am gravely concerned by the Minister Paschal Donohoe’s silence on the issue,” he said.

“I’m calling on him to categorically rule out any sale of the Government’s 25 per cent stake in Aer Lingus, and by doing so effectively block the IAG takeover.”

The current IAG bid, worth roughly `2.50 a share to Aer Lingus, is the third received by the airline since December.

The Aer Lingus board previously rejected two lesser offers from the group — who are keen to win control of the Irish airline and the valuable slots it occupies at Heathrow Airport.

If successful, IAG — which is headed up by former Aer Lingus Chief Executive Willie Walsh and currently owns the British Airways and Iberia airlines — will account for 51.6 per cent of passengers passing through the airport.

The potential monopoly was not lost on the people of Ireland, who voiced their concerns at news of the bid being considered by Aer Lingus on Twitter.

“Why the hell are British Airways buying Aer Lingus?! As usual, the British trying to take over everything,” Irish Karolina tweeted.

Paul O’Connor added to the discussion, tweeting: “I hope @aerlingus board do not accept #IAG takeover bid. Our airline needs to be Irish-owned. Sick of our country’s assets being sold off.”

Even British MP Barry Sheerman questioned the bid, tweeting “If Willie Walsh & IAG takeover @AerLingus will it kill the pride in a national airline as it has with @BritishAirways?”

While Aer Lingus is expected to formally respond to the IAG offer this week, they will need the support of the Irish Government, who own a 25 per cent share of the airline, and Ryanair, who have a 29.82 per cent stake in the carrier, to complete the deal.

While Ryanair claims to be open to any high bid share offers, it is the Government share that politicians are hoping will help block the takeover and its potentially negative impacts on jobs, connectivity and the economy in Ireland.

“The fallout from any sale of the airline is being dramatically underplayed,” said Fianna Fáil’s Deputy Dooley.

“The decision of Fianna Fáil Governments to maintain a strategic and significant shareholding in Aer Lingus was with a view to protecting the country against long term threats to our connectivity,” he added.

“That was the correct decision then and it is the correct decision now. Dumping this stock in order to raise some short term cash to fund election promises would be a major mistake that the travelling public will quickly regret.”

Mr Dooley went on to claim the “threat” to valuable Heathrow slots currently owned by Aer Lingus could “severely curtail” Ireland’s access to international destinations and the economic investment won off the back of these connections.

He also warned that the takeover could have repercussions for Dublin, Cork and Shannon airports, by “stymying their links with Heathrow and restricting access to other countries which are served via Heathrow”, while putting the livelihoods of more than 1,000 people currently in Aer Lingus employment at risk. 

Those concerns were backed by the IMPACT trade union, which represents cabin crew, pilots and some ground staff at Aer Lingus.

In a letter sent to Minister Donohoe, IMPACT national secretary Matt Staunton claimed the proposed takeover “represents a significant risk to the security of employment for Irish workers employed directly or indirectly by Aer Lingus”.

He urged the Minister to “consider the strategic importance” of retaining some holding in the airline, which “serves to maintain strong links with EU, US and other critical trading partners”.

Responding to concerns raised this week, Ireland’s Deputy Prime Minister Joan Burton claimed the Government would protect the nation’s international connections.

“What we will want to do as a Government, and what’s absolutely important, is to protect these slots and the connections of direct flights in and out of Ireland.”

Ahead of the Government’s official response to the IAG proposal, which is expected this week, Mr Dooley added: “The Government must act to ensure that it does not allow Aer Lingus management to cave to any bid from IAG.

"Ireland’s strategic national interests must be protected and that will not be done through a quick fire sale, which relinquishes valuable slots at Heathrow, risks up to 1,000 jobs and gives away forever an important strategic asset.”